China regains growth momentum, tweaks policy stance

HONG KONG - China's high frequency economic indicators confirm that growth is bottoming out, ANZ Bank says in a new research note. In particular, idt says, leading indicators such as money supply data and the producer price index (PPI) inflation showed signs of acceleration in March.

"With Q1 GDP registering 6.4%, we now revise our GDP forecast to 6.4% for full-year 2019, from 6.3% previously," the note says.

"As the growth momentum of the Chinese economy picks up, we believe that policymakers will re-assess the need for further stimulus.

"The Government will maintain a counter-cyclical stance, which will primarily be expressed through measures that support structural transformation."

ANZ says that, thanks to strong credit data in March, the People's Bank of China (PBoC) appears to be more cautious about further easing.

"The policy stance will likely place an emphasis on 'maintaining strategic patience' and 'alignment with fiscal and other policies'.

"Consequently, the likelihood of a cut in the reserve requirement ratio (RRR) in Q2 has decreased."   www.live.anz.com (ATI).